How can Bill and Melinda Gates increase other people's donations to fund public goods?

Abstract

We develop a simple theory which formally describes how charities can resolve the information asymmetry problems faced by small donors by working with large donors to generate quality signals. To test the model, we conducted two large-scale natural field experiments. In the first experiment, a charity focusing on poverty reduction solicited donations from prior donors and either announced a matching grant from the Bill and Melinda Gates Foundation, or made no mention of a match. In the second field experiment, the same charity sent direct mail solicitations to individuals who had not previously donated to the charity, and tested whether naming the Bill and Melinda Gates Foundation as the matching donor was more effective than not identifying the name of the matching donor. The first experiment demonstrates that the matching grant condition generates more and larger donations relative to no match. The second experiment shows that providing a credible quality signal by identifying the matching donor generates even more and larger donations than not naming the matching donor. Importantly, the treatment effects persist long after the matching period, and the quality signal is quite heterogeneous-the Gates' effect is much larger for prospective donors who had a record of giving to "poverty-oriented" charities. These two pieces of evidence support our model of quality signals as a key mechanism through which matching gifts inspire donors to give.

More than just your name: Public donations drive inferences of egoistic and altruistic motives

“…Some past research has linked public forms of giving to increased donations. Specifically, providing information about donors' identities has been shown to increase the percentage of people who subsequently contribute (Karlan & List, 2020), the average contribution they make (Andreoni & Petrie, 2004), and the amount contributed by donors overall (Karlan & List, 2020; Van Vugt & Hardy, 2010). However, these works focused on the impacts of knowing (vs. not knowing) who donated, or knowing one's own contributions will be displayed to others.…”

Nonprofits in Good Times and Bad Times

“…See Vesterlund (2006), List (2011), Payne (2013), andGee and for excellent reviews of that work. Much of this literature focuses on the manner in which micro conditions influence individual giving decisions, e.g., how donations are influenced by social pressure (Ariely et al, 2009;DellaVigna et al, 2012DellaVigna et al, , 2013Andreoni et al, 2016), by matching donations (Eckel and Grossman, 2003;Karlan and List, 2007;Meier, 2007), by seed money or lead donors (List and Lucking-Reiley, 2002;Karlan and List, 2020), by household income (Randolph, 1995;Auten et al, 2002;List, 2011;Kessler et al, 2019;Meer and Priday, 2020b), and by tax policy (Duquette, 2016(Duquette, , 2019Meer and Priday, 2020). A smaller set of studies focuses on the relationship between macro conditions and giving, such as papers relating to giving after large, tragic events (Lilley and Slonim, 2016;Bergdoll et al, 2019) and work relating to redistribution and fairness views at the societal level (Almås et al, 2020).…”

‘More Bang for the Buck’? Evidence on the Effectiveness of an Energy Efficiency Subsidy

“… See Bernheim and Taubinsky (2018) for an overview.4 Likewise,Karlan and List (2020) find in the context of charitable giving that naming the donor of a matching grant increases donations compared to a pure grant without further information. Following the authors' argumentation, this is because the donors' name reveals information and impacts the beliefs of the potential donors.…”